Internal hydro- and wind portfolio optimisation in real-time market operations

TL;DR

This paper explores real-time internal balancing of hydro and wind power assets to reduce imbalance costs and volatility, proposing a shift from plant-specific schedules to a unified load requirement within the intraday market context.

Contribution

It introduces a novel approach for internal imbalance handling in hydro-wind portfolios, demonstrating cost reduction and volatility mitigation in intraday market operations.

Findings

Internal balancing reduces imbalance costs for hydro-wind portfolios.

Unified load scheduling decreases market volatility and risk.

Internal handling outperforms market trading alone in cost efficiency.

Abstract

In this paper aspects related to handling of intraday imbalances for hydro and wind power are addressed. The definition of imbalance cost is established and used to describe the potential benefits of shifting from plant-specific schedules to a common load requirement for wind and hydropower units in the same price area. The Nordpool intraday pay-as-bid market has been the basis for evaluation of imbalances, and some main characteristics for this market has been described. We consider how internal handling of complementary imbalances within the same river system with high inflow uncertainty and constrained reservoirs can reduce volatility in short-term marginal cost and risk compared to trading in the intraday market. We have also shown the the imbalance cost for a power producer with both wind and hydropower assets can be reduced by internal balancing in combination with sales and purchase in a pay-as-bid intraday market